Telenor was found to be pricing out its competitors which relied on wholesale access to offer mobile broadband between 2008 and 2012.
A highly concentrated market: The Norwegian market is characterised by a high-degree of concentration, with Telenor as the dominant operator in both fixed and mobile. Telenor is subject to extensive ex-ante regulation across both sectors (including a national roaming obligation). In 2018, the Norwegian competition authority fined the company NOK788m (USD82.9m) for abuse of its dominant position in the mobile market.
A €112m fine for margin-squeeze: On 30 June 2020, the EFTA Surveillance Authority (ESA) concluded its investigation into Telenor, and found that the company abused its market dominance. Telenor’s wholesale prices for access were higher than the retail prices it charged its own residential users for mobile broadband services on large-screen devices, such as tablets and laptops. As a result, despite an increase in consumer demand for mobile data, rivals that were dependent on buying wholesale access from Telenor were incurring a loss. These margin-squeeze practices prevented rival companies from competing viably from 2008 to the end of 2012. The ESA imposed a total fine of EUR111.95m, which takes into account the duration and gravity of the infringement, as well as the value of Telenor’s revenue in the affected markets.
Telenor will challenge the decision: Norway’s national regulator, Nkom, said in a statement they find the ESA’s decision ‘not surprising’ due to Telenor’s strong dominance in the Norwegian market. Telenor said it was surprised by the decision and will appeal. The company notes the case concerns a small segment of the mobile market, and matters which date ‘way back’. They say there was very limited demand for mobile broadband as a separate product (delivered through a USB-dongle) in 2008–2012, and the market demand has subsequently shifted to other products.
